| Oct 13, 2021

5 Ways Small Businesses Can Drive Growth and Increase Efficiency

Here are several simple and proven ways for small service-based businesses to drive growth and increase efficiency.
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By Bhavin Rawal |

<1 minutes

In 2020, I watched my daughter’s favorite frozen yogurt shop, my wife’s favorite salon and my favorite restaurant disappear. The COVID-19 pandemic shuttered the doors of so many small businesses that everyone can probably name at least one of their favorite spots that no longer exists. More than the yogurt, the haircuts, or the dinners, it was the empty storefronts, which I knew would scare off other budding entrepreneurs from ever coming back, that drove me to switch from financial services back to helping small businesses grow. To that end, I want to offer guidance to small business owners struggling to achieve growth in these difficult times.

Whether small businesses sell a product or a service naturally affects their approach to driving growth and efficiency. With a product-based business, a more efficient production line results in more product to sell and more income that can be invested in growing the company. On the other hand, service-based small businesses can only earn as much as they have time to commit themselves and their employees to providing service, so driving growth and efficiency is considerably less clear-cut. 

Service-based businesses, like auto body shops, bakers, and salons, are those that customers must seek out and book to retain their services. Even reservations at restaurants are a form of booking, which makes them service-based businesses rather than product-based ones, and as a result, time is always a significant constraint for these businesses. Battling these limitations, service-based businesses end up in a constant state of struggle to find new leads and optimize their processes to drive growth and efficiency. 

Here are five suggestions that can help:

1. Happy Customers Bring More Customers

How does a small business grow? I’ve put this question to numerous service-based business owners and reliably, they tell me that nothing beats word of mouth: 85% of small businesses reportedly gain new customers from word of mouth recommendations and consumers referred this way tend to spend twice as much. Caring for your current customer base is the best way of getting referrals, but getting them to make those referrals takes a little work. 

The first step involved in turning a happy customer into a new customer is encouraging your clients to leave reviews on your various social media. Then, follow up with those who leave positive reviews by asking them to refer someone else to their services. A client willing to positively review your small business will probably also be glad to recommend your business to someone they regard as a potential customer; this little nudge may be all they need to do it.  

2. Drive Local Awareness

When you think of how small bakeries or auto shops find new clients, you probably don’t imagine extensive ad campaigns on major media outlets, and with good reason. National advertising has little to offer service-based businesses trying to grow if their services only extend to a single city. Instead, the most successful service-based small businesses are the ones that devise creative ways of advertising through their local community. 

Going local is the best way to get the word out about your service-based business, so focus your efforts on local advertising options and boosting customer referrals. In fact, 93% of consumers say they would rather spend more money and recommend others to do the same for a company that cares for their community. Interact with local social media groups, participate in local activities, and encourage customer loyalty with perks or referral benefits. Letting your community know what your business offers and giving them a reason to talk about it is the best advertising money can buy.

3. Have a Voice

A great way to familiarize yourself with the local community is to become a thought leader in your area of expertise. In fact, 84% of consumers expect brands to be creating content. Publish content that shares tricks of the trade to let potential clients know that yours is a business willing to help the community. Of course, others may try to copy you, but imitators will be unlikely to match your quality. Instead, they’ll aspire to learn your skills and end up promoting your voice in the process.

To get started, check out what is already out there. Go onto YouTube, Medium, or Substack and look at some of the most popular articles or videos for ideas to help you come up with content that hits. Target your community by sharing your content on local social media pages and ask your customers to do the same. Having a voice in the community sets you apart from the competition and gives customers another reason to stay engaged with your business.

4. Communicate With Your Customers

While we may not always like to hear negative feedback, keeping the lines of communication open to customer insight will result in more efficiency for your business. 42% of customers expect a response to their social media queries within an hour, but over 88% of companies are still taking over 24 hours. This failure can be an opportunity for small businesses who stay engaged with their clients on multiple platforms and encourage feedback. Listening to customers’ suggestions for improvement will not only help you take better care of them, but also help your business provide better services. 

When you respond to customer feedback with changes that better meet their expectations, they feel more appreciated and heard. Their role in collaborating with you and your business will make them even more likely to want to leave reviews and 71% of customers are more likely to recommend a brand if they feel happy with their customer service. It will also keep them loyal to your company over the competition, making long-term customers and sources of referrals. 

5. Take Advantage of Technology

Of course, non-stop pings from clients on multiple messaging services can be overwhelming, so find ways to manage technology proactively to boost business efficiency. Small business owners who took advantage of at least one business app during the COVID crisis suffered 12% less revenue loss; five or more business apps and their losses were 33% less. Take advantage of the digital tools that can help you merge and manage all of your sources of customer collaboration in one place. 

Instead of always struggling to understand the status of your business, leverage the available technology that can put that information at your fingertips. Automation services in generating leads, managing payments, and reporting will make your service-based business more efficient in all areas. Even some degree of customer engagement can be automated; consider, for example, a regular schedule of emails with pointers or helpful tips. By making use of available technologies to reduce the demands on your limited time, you free up more of it to dedicate to creativity and innovation.

Of course, as with any business, retaining quality employees who want to grow with the company will result in greater overall efficiency, so make an effort to keep a motivated team. With a service-based business, even a slight increase in the number of clients seen in a given day can have a tremendous impact on the bottom line, so if one employee can handle five clients in a day, these recommendations may allow them to see up to seven or eight instead. This will ensure that all parties of the business are continuing to thrive.

Bhavin Rawal
Bhavin Rawal
Executive Author

Chief Product Officer, GoSite

Bhavin Rawal is the Chief Product Officer of GoSite, the all-in-one platform that empowers small business owners to collaborate with their customers to drive growth and increase business efficiency. view profile


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